Hello everyone! Today I thought I’d talk a little bit about my latest endeavor, learning to budget properly!

---

Now, I have to start out by saying that I acknowledge that I have an enormous amount of privilege here. I’m an almost 30 year old woman who has never really “needed” a budget. It’s honestly a bit embarrassing to admit that I haven’t really kept a close eye on my finances in the past. I have a whole post planned about the lessons that this pandemic has taught me, but that is one of the biggest for sure. Having gone through over a year of unemployment, I have really become conscious about my spending habits and I am intent on making sure this new outlook is permanent.

Oh! If you’re new here (newer than May 2020) you might be wondering, what’s BirthMay? Well, every year I blog every day in May because it is my birth month. I just figured it was something fun to do, and it has proven to be really enjoyable for me. This will be the fifth BirthMay on my blog! No matter how many BirthMays you’ve been through with me, thank you for being here this BirthMay and thank you for your support!

---

My Pre-Pandemic “Budget”

So before the pandemic, my “budget” was pretty much me trying to not spend more than I made. I never made any super crazy purchases but I never limited myself either. I have always lived at my parent’s house as I didn’t want to have to worry about higher expenses for rent or other utilities. Again, that is something that I admit I’m very privileged about. I know that’s not an option for everyone! But it was and continues to be an option for me, and it is something I’m very grateful for. I really am not trying to brag here, I just want to be upfront that I know my experience is not universal.

While I could move out, I was just not interested in having to give up more of my income for things like rent versus spending it on fun stuff like travel or musicals. I’m still not too interested in that although my priorities have changed. But more on that in a bit.

Budgeting Wake Up Call

So I would say that losing my job and becoming dependent on unemployment and my savings was a wake up call that I desperately needed. Again, I never spent wild amounts so I wasn’t super irresponsible but I did really need to pay more attention and grow up with how I handled finances.

When I was furloughed, I knew I was in a very fortunate position that losing my steady income didn’t stress me out. Honestly, I was relieved because I was working in such a toxic environment that I really needed to get out, but I had been too comfortable to leave on my own. But since the pandemic devastated my old industry (events and travel), I knew it was going to be tough to find something that would work for me. And I was intent that I would wait for the right opportunity to come by, and not just take any old job.

As I wasn’t sure how long my job search would take, I scaled my spending way, way back. There are many months where I didn’t spend anything beyond things like rent or groceries. I managed to save nearly everything that I was paid from unemployment. Since I didn’t need a car anymore, I sold it to my sister for a small amount, saving myself the car insurance payments. I have heavily relied on my local library for books instead of buying them, and stuff like that! I am honestly so proud of having done this and it really opened my eyes that I don’t need “things”. Now, I wasn’t perfect. I did buy a couple things here and there, like a Taylor Swift sweater for example. But for the most part, I managed to keep my spending down. Going forward I want to focus on saving money and spending more on experiences or travel versus on “stuff”.

But that didn’t solve the problem of my nonexistent budget! Since I never really tracked my expenses beyond an overall snapshot, when I started trying to create a budget, I was utterly lost. How much do I normally spend on clothing a month? On subscriptions? Or books or snacks or just about anything else? And how to I figure out a budget going forward?

Creating a Budget

So in my bullet journal I started a “budget” page. It really wasn’t a budget though, it was just a tracker of my income and expenses. That really helped get me thinking and visualizing how much I was spending and on what. It was a really helpful exercise and got my whole budgeting mindset started.

In order to create a budget, I really thought about what was currently working and not working. And there was a lot that just wasn’t working! For example, I was only sitting down to track this stuff at the end of the month. That was sort of silly because I had a limited idea of how my budget was looking throughout the month, so I decided I would sit down weekly at least to track everything. So while that first attempt at a budget ultimately wasn’t working, it was super helpful in making me realize what information I was missing.

I realized that the best way for me to track this all would be in a spreadsheet on my computer. I have pretty advanced Excel skills so I created my own template but Excel has a lot of really good starter templates that I looked at for inspiration. Pinterest and YouTube had great ideas too! So I took what I liked from each and went from there. I found the functions “SumIf”, “VLookUp”, and other Excel features like Data Validation to be extremely helpful here.

Another weird thing that helped me was my accounting experience. It’s quite limited, I’m not going to lie but the small amount of knowledge I had here was helpful. I was a business major in college and have an MBA, in addition to having tracked cash flow for my dad’s business for many years. I naturally think of finances through that lens now so that helped me a ton in creating my categories and thinking about how to separate everything out. Plus, a big thing that was important to me due to this is that every dollar should be budgeted somewhere. I later realized this is something that a ton of people who share budgeting tips do recommend, and I’m guessing that they probably have a similar background to mine where they have some level of business accounting knowledge.

Both of those things were not necessary to create a budget, of course, but I think it made it so that I didn’t find the basic templates helpful. So… basically I chose to make this process more difficult! But I love Excel and I found it to be insanely fun. Because I’m a nerd. Please understand it was because I’m a nerd!

Once I had a template I liked, I put it to the test and entered everything for 2021 so far. I found this super helpful so I could see the history of my income and expenses, instead of just guessing. I still find that I have random stuff come up such as renewing my driver’s license. But I think it’s just about trying to get a good balance and a good grasp on stuff to better anticipate these things.

So here’s a breakdown of my categories:

• Income
  • Unemployment (January-May)
  • Salary (May-FOREVER I hope! I’m employed again, YAY! Oh, and this is of course just the take home pay, all the stuff like insurance and 401k contributions are tracked on another sheet and not in the monthly sheets.)
  • Other (Basically if I sell stuff on Poshmark, someone pays me back a loan, or random stuff like that.)
• Expenses
  • Fixed Bills – Rent, Phone bill, Groceries, Student Loans (although those are in forbearance until August I believe it is)
  • Fun – Shopping, Clothing (I’m honestly not sure why I separated this out, I’m probably going to change it), Subscriptions (I could have put it into Fixed Bills, but I didn’t), Dining (useless now, but probably not in the future), and Misc. (for things like gifts)
  • “Fudge” (I saw this as an “oops” category on YouTube. It’s meant to be a sort of “just in case I spend a bit more” category but I don’t know if I really need to keep it because I could use the Misc. subcategory for that.)
• Savings
  • This one is pretty self explanatory although I think I need to make subcategories for this like “travel” or “house” and such.

So that’s where we currently are in the budget!

What’s Next?

So I once got some advice to have multiple savings accounts for certain things. For example, my emergency funds should be in a separate account than my savings for a house and so on. I don’t really want to have to track so many accounts so instead I might try to track it in a different spreadsheet and just continue to keep it together. If anyone has thoughts on this idea though, positive or negative, let me know!

I do think I’m going to continue to adjust my monthly budget too. Especially since I’ll probably get a car at some point and I might end up with a car payment if I don’t pay it all in cash, or when student loan payments start up again.

I’ve also realized that my savings plan is still mostly saving whatever is “left over” and my focus is on trying to make sure the most amount possible is left over. But I’ve seen many people say it should be the opposite, the savings should happen right away and then work with the left over as the budget. I think that’s a better idea and so I think I’ll try to do that instead when I have a better understanding of my expenses.

---

So that’s where I am in creating and maintaining a budget! I can provide more tips if anyone wants, such as where I got ideas and helpful resources. Or even step by step guidance? Let me know if that’s something you want!

Thanks for reading!

Pamela

Follow me on social media!

Instagram | Youtube | Facebook | Twitter | Bloglovin‘ |Pinterest | Poshmark | Email